Desert Control AS - Announcement of a Fully Underwritten Rights Issue
1 July 2026
INSIDE INFORMATION
Desert Control AS - Announcement of a Fully Underwritten Rights Issue
NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, THE HONG KONG SPECIAL ADMINISTRATIVE REGION OF THE PEOPLE'S REPUBLIC OF CHINA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. OTHER RESTRICTIONS ARE APPLICABLE. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT
Sandnes, Norway, 1 July 2026. Desert Control AS (the "Company") hereby announces a fully underwritten rights issue with preferential subscription rights (the "Subscription Rights") for the Company's existing shareholders to raise gross proceeds of NOK 70 million (the "Rights Issue"), which will be fully underwritten by a consortium of underwriters (the "Underwriters") comprising (i) certain larger existing shareholders in the Company, representing approx. 67% of the total underwritten amount (including approx. 45% commitment from existing management and members of the Company's board of directors (the "Board")), and (ii) new investors.
Comments from the CEO
"As outlined in our Capital Markets Day on 13 May, the Company is making substantial progress across its business initiatives. In the first half of the year, we completed 29 pilots across the American Southwest and a full commercial application at Berkeley Country Club under our PAYS model. These pilots cover a broad array of crop types and geographic areas within our focus region and are largely with growers farming more than 1,000 acres.
We continue to see strong results regarding water and input savings and promising early signs of yield improvement in several crop types. Encouragingly, in addition to interest from our targeted permanent crop growers, we have seen increasing interest from growers of high value vegetable crops in both California and Arizona. With harvest season beginning in much of California, we anticipate a temporary slowdown in piloting activity, but also an acceleration in pilot results and commercial conversations.
Our R&D organization, led by our new CSO Mike Canady, continues to expand our collaborations with customers and academic institutions to better understand LNC's ability to enhance yields and drive input savings. Finally, we expect to be in the field in early July with our new LNC production unit. It has completed extensive testing and we look forward to harnessing its capabilities to help our customers improve the health of their soil."
James Thomas, CEO
Use of Proceeds
The net proceeds from the Rights Issue will be used to extend cash runway through approximately 10 to 14 months following completion of the Rights Issue, covering core operations, working capital and further investments in production units and sales teams, as well as other general corporate purposes.
Proposed Rights Issue
The Rights Issue is subject to, inter alia, the following conditions (together, the "Conditions"): (i) an extraordinary general meeting (the "EGM") of the Company, expected to be held on 16 July 2026, having resolved the Rights Issue, (ii) the EGM granting the Board an authorization to increase the share capital for the purpose of issuance of Consideration Shares (as defined below), (iii) the Company having published a national prospectus (the "Prospectus") as registered in the Norwegian Register of Business Enterprises ("NRBE") and (iv) the Underwriting Agreements (as defined below) remaining in full force and effect.
Arctic Securities AS has been engaged as sole manager (the "Manager") for the Rights Issue.
Subject to approval by the EGM, each existing shareholder of the Company as of the date of the EGM (and being registered as such in Euronext Securities Oslo, the Norwegian Central Securities Depository (the "VPS") as at the expiry of the second trading day following the EGM (the "Record Date")) will be granted Subscription Rights (rounded down to the nearest whole number of Subscription Rights) in proportion to the number of existing shares registered in the Company's shareholder register as at the Record Date, cf. section 10-4 of the Norwegian Private Limited Liability Companies Act. Each Subscription Right will, subject to applicable securities laws, give the right to subscribe for and be allocated one new share in the Company (the "Offer Shares"). The Subscription Rights will be tradable and listed on the Euronext Growth Oslo ("EGO") from and including the first day of the subscription period and until 16:30 CEST four trading days prior to the expiry of the subscription period. Over-subscription with Subscription Rights will be allowed. Except for subscriptions by David Borah (Company CFO) and Juli Jessen (Company Board member) as an integral component of their underwriting obligation, subscription without Subscription Rights will not be permitted.
The subscription price in the Rights Issue (the "Subscription Price"), and thus the exact number of Offer Shares and the exact amount of the share capital increase, will be proposed by the Board, based on a recommendation from the Manager, on the day prior to the EGM. Pursuant to the Underwriting Agreements (as defined below), the Subscription Price shall be equal to the theoretical share price exclusive of the subscription rights (TERP), calculated on the basis of the volume-weighted average price (VWAP) of the Company's shares on EGO over the three last trading days prior to the date of the EGM, less a discount of at least 32.5%. The Board's resolution in this respect will be announced through a stock exchange announcement on the day prior to the EGM and be reflected in the final proposed resolution to the EGM.
Notice of the EGM is expected to be distributed to the Company's shareholders on or about 2 July 2026 and published in a separate stock exchange announcement.
It is contemplated that the Rights Issue will be conducted with a two-week subscription period, commencing on or about 27 July 2026, subject to satisfaction of the Conditions for the Rights Issue.
All dates and other figures with respect to the Rights Issue included herein remain tentative and subject to change. Any changes will be announced at the EGM or through stock exchange announcements.
Underwriting
Pursuant to, and subject to the terms and conditions of the underwriting agreements between the Company and the Underwriters (the "Underwriting Agreements"), the Underwriters have undertaken on a pro-rata basis (not jointly) to underwrite an aggregate subscription amount in the Rights Issue of NOK 70 million (the "Total Underwriting Obligation"). Any Offer Shares subscribed in the Rights Issue will reduce the underwriting commitment of the Underwriters.
Each of the Underwriters is entitled to an underwriting fee of either (i) 10% of the underwriting obligation if received as a payment in cash or (ii) 12% of the underwriting obligation if received as new shares in the Company issued at the Subscription Price (the "Consideration Shares"), such fee being subject to and payable upon completion of the Rights Issue (i.e. upon registration of the share capital increase pertaining to the Rights Issue with the NRBE).
Each Underwriter has undertaken to vote in favor of the resolutions required to complete the Rights Issue at the EGM, provided that it is a shareholder in the Company at the date of the EGM.
Allocation
The allocation principles for the Offer Shares in the Rights Issue will be set out in the EGM resolution and in the Prospectus, but are expected to be as set out below.
a) Firstly, allocation of Offer Shares to subscribers will be made in accordance with granted and acquired Subscription Rights which have been validly exercised during the Subscription Period. Each Subscription Right will give the right to subscribe and be allocated one Offer Share in the Rights Issue.
b) Secondly, if not all Subscription Rights are validly exercised during the Subscription Period and there are remaining unallocated Offer Shares following the allocation pursuant to paragraph a) above, subscribers who have exercised their Subscription Rights and over-subscribed, will be allocated additional Offer Shares on a pro rata basis based on the number of Subscription Rights exercised by each subscriber. To the extent that pro-rate allocation is not possible, the Company will determine the allocation by drawing of lots.
c) Thirdly, Offer Shares not allocated pursuant to a) and b) above, will be allocated to the underwriters David Borah (Company CFO) and Juli Jessen (Company Board member), or their respective directly or indirectly controlled companies, pro rata with an amount corresponding to the NOK equivalent of up to USD 100,000 each and USD 200,000 in aggregate.
d) Finally, Offer Shares not allocated pursuant to paragraph a) through c) above, will be allocated to and subscribed by the Underwriters pursuant to, and in accordance with, each Underwriter's underwriting obligation pursuant to the terms and conditions of Underwriting Agreements.
The final allocation principles resolved by the EGM and set out in the Prospectus may deviate from those set out above.
Indicative timeline
According to the current tentative timetable, and subject to all of the Conditions being met, it is expected that the Rights Issue will take place according to the following tentative timeline:
EGM: On or around 16 July 2026
Last day including Subscription Rights: On or around 16 July 2026
First day of trading in the shares excluding Subscription Rights: On or around 17 July 2026
Record Date: On or around 20 July 2026
Publication of the Prospectus: On or around 23 July 2026
Commencement of the subscription period and first day of trading in the Subscription Rights: On or around 27 July 2026
Last day of trading in the Subscription Rights: On or around 4 August 2026
Last day of the subscription period: On or around 10 August 2026
Allocation of the Offer Shares: On or around 11 August 2026
Payment of the Offer Shares: On or around 14 August 2026
Registration of the share capital increase with the NRBE: On or around 20 August 2026
All dates and other figures with respect to the Rights Issue included herein remain tentative and subject to change. Any changes will be announced at the EGM or through stock exchange announcements.
Advokatfirmaet Selmer AS is acting as legal advisor to the Company. Advokatfirmaet Thommessen AS is acting as legal advisor to the Manager.
For more information, please contact:
David Borah
Chief Financial Officer
This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. This stock exchange announcement was published by David Borah, Chief Financial Officer of Desert Control AS, at the time and date stated above.
About Desert Control:
Desert Control develops innovative solutions to enhance soil health, conserve water, and promote ecosystem resilience. Its proprietary Liquid Natural Clay (LNC) transforms sandy, fast-draining soils to improve water retention and nutrient availability. The Company delivers customized, outcome-based solutions that strengthen sustainability and operational efficiency across agriculture, forestry, and green landscapes. Desert Control's technology supports long-term resource preservation and climate resilience.
Important Notice
This announcement does not constitute an offer of securities for sale or a solicitation of an offer to purchase securities of the Company in the United States or any other jurisdiction. Copies of this document may not be sent to jurisdictions, or distributed in or sent from jurisdictions, in which this is barred or prohibited by law. The securities of the Company may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"). The securities of the Company have not been, and will not be, registered under the U.S. Securities Act. Any sale in the United States of the securities mentioned in this communication will be made solely to "qualified institutional buyers" as defined in Rule 144A under the U.S. Securities Act. No public offering of the securities will be made in the United States.
Any offering of the securities referred to in this announcement will be made by means of the Prospectus.
This announcement is an advertisement and is not a prospectus for the purposes of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on prospectuses to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (as amended) as implemented in any EEA Member State (the "Prospectus Regulation"). Investors should not subscribe for any securities referred to in this announcement except on the basis of information contained in the Prospectus. Copies of the Prospectus will, following publication, be available from the Company's registered office and, subject to certain exceptions, on the website of the Manager. In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State.
In the United Kingdom, this communication is only addressed to and is only directed at persons in the United Kingdom that are "qualified investors" as defined in paragraph 15 of Schedule 1 to the Public Offers and Admissions to Trading regulations 2024, and that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will only be conducted with relevant persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.
This document is not for publication or distribution in, directly or indirectly, Australia, Canada, Japan, the United States or any other jurisdiction in which such release, publication or distribution would be unlawful, and it does not constitute an offer or invitation to subscribe for or purchase any securities in such countries or in any other jurisdiction. In particular, the document and the information contained herein should not be distributed or otherwise transmitted into the United States or to publications with a general circulation in the United States of America.
The Manager is acting for the Company in connection with the Rights Issue and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients or for providing advice in relation to the Rights Issue or any transaction or arrangement referred to in this announcement.
Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "anticipate", "believe", "continue", "estimate", "expect", "intends", "may", "should", "will" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The information, opinions and forward-looking statements contained in this announcement speak only as at its date and are subject to change without notice. This announcement is made by, and is the responsibility of, the Company.
Neither the Manager nor any of their affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein. This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities of the Company. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.
Neither the Manager nor any of their respective affiliates accepts any liability arising from the use of this announcement.